Regulating Organized Crime

Criminal Law Contra Regulations

The focus of this article is the prevention of organized crime through regulatory schemes. Criminal law is not interesting from a crime prevention perspective since it is the criminal law rules themselves that regard the acts as crimes and, thus, as potentially preventable. If there is no criminal law, there is no crime to prevent. Here we ignore the possible inherent crime prevention effects of criminal law.

There are few crimes specifically designated as organized crimes; instead, the customary body of criminal law rules is applied. There are, of course, examples of criminal law rules that specifically address organized crime, such as the United States’ RICO legislation (Racketeer Influenced and Corrupt Organizations Act), which focuses on individuals in leadership positions who orchestrate the offenses committed by others. There are also laws that penalize membership in a criminal organization, those that deem the organized nature of the offense an aggravating circumstance (increasing the sentence), and those that grant crime prevention authorities special powers in conjunction with the investigation of organized crime (Korsell and Larsson 2011).

If, for the moment, we leave organized crime behind and instead think exclusively in terms of regulation, a legislature’s point of departure is the existence of a problem, for example, alcohol abuse, insufficient corporate regard for the environment, or reckless lending on the part of banks. To combat these problems, a legislature could enact criminal laws—typically prohibitions—or could choose to establish some form of regulatory framework to rein in the market or solve the problem (M. Clarke 2000). Because the general perception is that alcohol has positive qualities, that industry is useful, and that banks serve an important societal function, criminal laws are hardly a solution. Instead, a regulatory scheme offers a way to counteract the negative aspects in otherwise desirable goods or entities. Most countries impose various restrictions on producing and serving alcohol. The discharge of effluents and other environmental disturbances on the part of companies are strictly regulated, as are banking operations.

In other words, it is typical that regulatory schemes are enacted to rein in activities that are in some way beneficial to society, but hold the potential for disorder, excess, or abuse (Baldwin and Cave 1999; M. Clarke 2000). Of course, a regulatory scheme can—and in fact commonly does—contain penal provisions, but punishments are not the key element in most regulatory legislation.

However, the primary focus in this section is not on the regulatory scheme—prohibitions, rationing, taxation, and other restrictions—because the implementation of such regulatory schemes seldom takes place with any significant attention to the simultaneous prevention of misuse by organized crime. As noted, the possibilities for exploiting the regulatory scheme are what make it interesting for organized crime. One can, for example, set a cap on cigarette taxes that makes smuggling unprofitable or take other measures to avoid fueling criminality. In this way, and to put it in situational terminology, one is reducing the rewards of committing a crime. A reasonable point of departure is, however, that regulations primarily seek to rectify the problems that are the subject of the regulation, not address the abuse that can follow in its path.

There is indeed an interest in crime proofing, that is, proactively assessing the risks of exploitation of legislation (Savona 2006). Swedish legislation even includes an express requirement to consider the crime prevention aspects of proposed legislation (Korsell 2002). My impression is, however, that such exercises are not systematically conducted.

Situational Crime Prevention with Respect to Exploitation of Regulatory Schemes

The purpose of situational crime prevention is to increase the efforts or the risks entailed in committing crime, to reduce the rewards, to reduce provocation, and to remove excuses to commit crime (R. V. Clarke 1997). It involves defining the problem presented by a specific crime to reveal the situational factors that facilitate that crime. Initially, this method was used with respect to traditional criminality, such as theft. Over time, situational crime prevention has attained a significantly wider area of application (Bullock, Clarke, and Tilley 2010). I have written about how situational crime prevention can be used with respect to economic crime (Korsell 2005, 5), to counteract various forms of fraud and cheating (Korsell and Nilsson 2003), and with respect to certain organized crimes (Skinnari and Korsell 2010).

Situational crime prevention is based on investigating the specific criminal problems to discover the situational factors that enable or facilitate the offense (R. V. Clarke 1997). The next step is to intervene and affect these situational factors and, thus, render commission of the offense impossible or make it more difficult, or affect the perpetrator’s motivations for committing the crime. As a rule, this involves influencing the situational factors at the locality and scene—in other words, on a micro level. However, such situational factors can also be influenced on the macro level (Freilich and Newman 2016). One way of doing so is through a regulatory scheme. In such cases this does not involve the fundamental provisions of the regulatory scheme—prohibition, restrictions, taxes—but instead involves adding various supplements to prevent crime.

The following discussion uses a series of examples to show how situational crime prevention can be used to analyze problems to prevent organized crime exploitation of regulatory schemes. While most of the examples come from Swedish regulations, the goal is to describe their generic features and thus avoid in-depth focus on specific national features. The structure is based on specific criminality problems that arise because of regulatory schemes. Each section then describes how situational solutions have contributed to reducing these problems. I have attempted to use the well-known “twenty-five techniques” (R. V. Clarke 1997). These techniques, for example, to control access to facilities or set rules, are used to increase the efforts to commit crime, to increase the risks to commit crime, to reduce the rewards from committing crime, to reduce provocations to commit crime, and to remove excuses to commit crime. The reader is kindly asked to overlook the fact that they are sometimes used creatively here.

Situational crime prevention’s twenty-five techniques offer a conceptual framework that clarifies and organizes the forms of intervention, and also reveals the vulnerabilities of the crime commission. It is in fact also a tool for analyzing the crime scripts: the actions, casts, roles, props, economic factors, locations, and stages. This analysis ensures that the twenty-five techniques are effectively targeted at identified weak points throughout the crime-commission process.

In Sweden, the situational crime prevention measures taken against narcotics and weapons take place outside of a regulatory environment. Since Sweden absolutely prohibits narcotics, and thus any and all sales occur on the illegal market, it is difficult to incorporate crime prevention elements into a regulatory scheme. Swedish regulations are also very strict in firearms. The weapons that appear in criminal circles in Sweden are primarily smuggled in from the Balkan region (Vesterhav and Korsell 2016, 12). The weapons in question are thus prohibited and are traded on an illegal market. Crime prevention is disregarded in weapons manufacturing or converting legal weapons.

Receiving Stolen Goods

There are many regulations aimed at preventing theft. Many of these have been initiated by the industry itself. Consumer organizations and insurance companies can also be important for theft prevention. This extensive regulatory scheme is worthy of its own section, but I do not explore it in detail; instead, I look at the market for stolen goods. The reason is that the degree of organization increases when stolen goods are placed in the market (Steffensmeier and Ulmer 2005).

For theft to pay, it must be possible to sell the stolen goods on a regular market just like any legitimate goods; the demand exists on the legitimate market, and thus it is the legitimate market that presents an interesting pricing picture for the perpetrators (Sund et al. 2006, 6). The receiver’s role is to have contact with both suppliers of stolen goods (thieves) and legitimate buyers. The stolen goods can sometimes be handled by several receivers to be further laundered and turned from stolen goods into legitimate goods.

As with regular commerce, there is some specialization among receivers, who can conduct a legitimate business where stolen goods can be assimilated, undetected, into the ordinary range of goods. The nature of the stolen goods and interest in attaining the best possible price often requires specialized receivers who can reach out to relevant buyers. It is also true that the greater the distance between the crime scene and the place where the stolen goods are exposed, the less the risk of discovery.

One Swedish crime preventive regulatory scheme is directed at business proprietors who sell used goods (Korsell and Norlin 2015, 15). While such business persons do not need permits, they must report their activities to the supervisory authority, which in Sweden is the police. When the business person purchases used goods, the seller’s identity must be verified and the purchase noted in a special ledger. There is then ongoing supervision to ensure that the business person satisfies these requirements. For a person who wishes to get rid of stolen goods and tries to sell them to a business person, the regulatory scheme increases the risks by reducing anonymity. The seller must disclose their identity through an ID check and the seller can later be tracked because their identity is registered with the business person. Nevertheless, with good receiver contacts, this does not pose a problem. With respect to the business person as well, however, the regulatory scheme increases the risk by reducing anonymity since the business must be reported. The business person is also subject to strengthening formal surveillance by field inspections by public agencies.

The legislation also applies to those who conduct auction activities and e-commerce. One problem is that individuals who conduct e-commerce present themselves as private individuals, but they are, in fact, running a business. Their interest is not only trying to evade both the registration obligation for used goods and the related obligations—they might find it even more important to have untaxed income. Business activity is subject to bookkeeping requirements, and the business must be taxed. Stolen goods also find their way out into e-commerce. As a result, tax agencies’ monitoring operations are very important to combat receipt of stolen goods on the Internet, notwithstanding that the agency’s primary purpose is to identify businesses for tax purposes.

It should be possible to influence the situational prerequisites for handling stolen goods by enforcing legislation on used goods and conducting proper field inspections. However, one problem is that the supervisory authority (the police) focuses more on the production chain (the thieves) than on the market for stolen goods (Korsell and Norlin 2015, 15). A greater understanding of how markets work and that situational crime prevention is not merely a question of shutting out thieves should expand the prerequisites for applying extant regulations.

Money Laundering

The illegal money that does not circulate in the “aquarium economy” must rise to the surface and enter the financial system (van Duyne, von Lampe, and Newell 2003; van Duyne and Levi 2005). The perpetrator’s classic problem is that it is difficult to use large quantities of cash for more extensive payments—a surfeit of cash can raise suspicions, not least at banks.

To a great extent, the money laundering regulatory scheme focuses on requiring certain business operators, such as banks and exchange offices, to report suspected transactions to the authorities (Horgby, Särnqvist, and Korsell 2015, 22). Somewhat larger transactions require information regarding the identity of the depositor or currency exchanger. This also applies to withdrawals. In other words, the handling of large sums of cash is carefully regulated. This is a clear regulatory scheme that, for the perpetrators, increases the risks by reducing anonymity.

One recent study concluded that the fixation on cash in money laundering monitoring is exaggerated (Horgby, Särnqvist, and Korsell 2015, 22). Most criminal money is already in the account environment. Economic crime often entails indirect profit by means of a company violating the rules to reduce its costs. This “murky” money becomes visible only when the company’s earnings increase (or losses decline).

Companies are used for large-scale unreported employment, a great number of frauds, and a host of other offenses; and companies as a rule need, and use, accounts. In other words, the money associated with crime is already accounted for. However, the money laundering regulations strike when money is withdrawn as cash. Great effort is thus expended on circumventing money laundering regulations. One way is to have individuals deposit or withdraw only small amounts of money on separate occasions to avoid suspicion. Another way is to transfer money abroad and link to a payment card that can be used internationally. There are even examples of perpetrators establishing their own exchange offices (Horgby, Särnqvist, and Korsell 2015, 22).

The money laundering regulatory scheme also mandates “know your customer” policies and internal monitoring systems to reduce the risk that the business can be used for money laundering. Taken as a whole, this increases the efforts for the perpetrator by controlling access to facilities, that is, the ordinary systems for investments, trading, cash, money transfers, and so forth.

Use of Companies

There is an increasing trend toward using companies in organized crime (Korsell, Rönnblom, and Skinnari 2016, 10). Some examples have already been given, and this section includes further examples. A registered company is necessary to act; present a genuine front; facilitate criminality; or be considered for tenders, licenses, subsidies, or support (Korsell and Norlin 2015, 15).

One situational crime prevention method would restrict registered companies as well as the transfer of an existing company to new owners. In addition to principles of freedom of trade, the state has a strong interest in facilitating business. It is hardly politically efficacious to set the bar too high for business activities (Korsell and Norlin 2015, 15). At times, however, demands have been made that a “business literacy certificate” be required to run a company (Korsell 2012). Such training would include relevant legislation such as bookkeeping and taxes. These proposals have not, however, led to legislation.

Operating a business in industries is, however, subject to licensing (Korsell and Norlin 2015, 15). A milder variant is the requirement to report certain business activities to public authorities. This article presents a few examples of such industries: restaurants and bars (serving alcohol), companies providing personal care assistance, and the sale of used goods. Other industries subject to economic crime problems with extensive licensing requirements include taxis and other professional transportation companies, such as freight shipping companies.

The current trend is toward requiring licensing for an increasing number of businesses (Korsell and Norlin 2015, 15). In addition to such directed efforts, there is a need for a system whereby the registration of companies and the acquisition of companies are generally subject to more restrictive legislation. The unifying purpose is to increase the effort needed to exploit companies for crime. One common way to exploit a company is to carry out fraud. The perpetrators take advantage of a company’s three Cs—capital, credit, and customers—to commit such offenses (Korsell, Rönnblom, and Skinnari 2016, 10). An acquired company can be plundered for its capital. It is easier for a company to obtain credit and purchase goods on invoice than it is for a private individual to do so. A company also misleads customers differently than a private individual.

Outlaw Motorcycle Gangs

A certain stratum of organized crime comprises outlaw motorcycle gangs. They are visible, wear gang symbols, have clubhouses, and exhibit provocative behaviors in the local community. This palpable presence often leads to their serving as a symbol of organized crime, and causes their criminality to be overstated. Their significance is because their presence makes people feel unsafe. Social legitimacy is undermined when there is a perception that the authorities are unable to impede the outlaw gangs presence in the local community. This “bad” reputation can, however, aid gang members since it signals high criminal capacity (Vesterhav and Korsell 2016, 12).

One major problem is that outlaw motorcycle gangs become style icons for many others in the criminal environment. As a result, it has become increasingly common to form gangs to increase fear capital, protect members, and facilitate criminal activity. When constellations include many people—and have something to prove to themselves and others—they bring with them an escalation of the ever-present conflicts in the criminal environment (Vesterhav and Korsell 2016, 12).

Various methods have, however, been used to combat gangs. Restaurants and bars have banded together in a form of self-regulation to prohibit guests from wearing gang symbols, such as vests with certain patches on the back (Korsell et al. 2010). This can be seen as a form of removing excuses by setting rules since gang membership and criminal fear capital are not perceived as assets by restaurant owners, personnel, and guests in an environment that gang members find attractive. The criminal lifestyle includes frequenting restaurants and bars.

When gang members behave in a restaurant as if they own the place, they are also making a show of the power that the gang can exploit in criminal activities, such as extortion or collection. When it becomes somewhat less possible for gang members to behave this way—when an arena for a demonstration of power is precluded—there has been an increase in effort due to hardened targets.

At a local level, a great deal of creativity has to be used to force the gang to leave its clubhouse or to prevent it from obtaining a lease in the first place (Korsell et al. 2010). The latter is done through zoning provisions for the use of land and buildings, which may entail that the buildings cannot be used for such purposes. Public authorities can also monitor compliance with fire safety rules and other regulations, and make sure that building permits have been obtained for any construction work that has been performed.

Prior legislation provided municipalities the right of first refusal when certain types of properties were sold. This was used to prevent gangs from taking over properties (Korsell et al. 2010). Although those regulations no longer exist, municipalities do offer a higher price and, in that way, become owners of properties for the sole purpose of not allowing the gang to obtain a “bridgehead” in the local community. This undeniably increases the efforts for gangs that need properties and leases.

Unreported Employment in Construction Contracting

Unreported employment is common and is not usually linked to organized crime. One can, however, consider organized crime when unreported employment is conducted on a large scale. A labor force is not the only necessary component. Special individuals, “fixers,” are engaged to register companies, open accounts, write invoices, convert funds on account to cash, and assume responsibility for the actual payments (Karlsson and Korsell 2007, 27). “Walkers” are needed to withdraw cash to pay the unreported employees. If something goes wrong, “muscle” is contacted. Perpetrators using unreported employees may also need to bribe their way into projects.

The construction and facilities industry is subject to organized forms of unreported employment in most countries (van Duyne and Houtzager 2005). One explanation for this is the structural changes in the industry that have led to fragmentation, whereby a series of subcontractors carry out various parts of the project (Karlsson and Korsell 2007, 27). The unreported employment is often hidden in the chain of subcontractors. Time pressure and competition also contribute to unreported employment.

With nothing more than a cursory glance at a construction site, it is difficult to understand the extensive unreported employment that takes place there. Assimilation into the legitimacy of a legal business benefits organized unreported employment. Unreported employment is best detected when public authorities are on site to identify the individuals working. A reconciliation can then determine whether taxes were withheld and employer’s contributions were actually paid for these individuals (Swedish Ministry of Finance 2005). One crime prevention reform that has been instituted requires construction sites to have a personnel log that notes all employees on the shift (Swedish Tax Agency 2015). This enables tax agency officials to carry out short and efficient inspection visits to see whether the names in the personnel log match the individuals working on site. An administrative fine may be imposed in the event of shortcomings but, above all, the company risks a repeat visit by tax agency officials for additional reconciliation. In the event of repeated shortcomings, the company will likely be subject to in-depth verifications such as an audit.

The personnel log system increases the risks by reducing anonymity. It is not possible to be anonymous at an inspection visit where attendance and the personnel log are reconciled. The crime prevention regulatory scheme involving the personnel log thus ensures compliance with tax legislation. The presence of tax agency officials in the field conducting inspection visits also increases the risks by strengthening formal surveillance. It is not possible to sufficiently underscore the importance of field inspections, since it is often the only way to detect unreported employment.

There is a great deal of creativity when it comes to avoiding taxes and fees. One method is to register new companies as employers and to have strawmen as responsible individuals (Korsell and Norlin 2015, 15). Another way is to mix reported, taxed wages with unreported, untaxed wages. All such measures to avoid getting caught in the personnel log checks increase the efforts, essentially by figuratively hardening targets.

Another industry with extensive organized unreported employment problems is the cleaning industry for commercial premises and offices (SOU 1997, 111). This work often takes place after office hours, at night when few people see who is cleaning. This facilitates unreported employment, as well as work performed by people lacking a work permit or who are illegally in the country. In addition, cleaning does not require language skills or special abilities, which makes it easy to use unlawful labor. In its wake, it may bring exploitation of workers and even human trafficking.

The special legislation requiring personnel logs does not, however, apply to the cleaning industry. It is difficult to apply because the work is mobile and takes place at other parties’ worksites. One option is to require something that is already imposed on contractors who perform work for the public sector: a certificate from the tax agency that the company has paid its taxes and charges. It is possible to check how much the company has previously paid in withholding taxes and employer’s contributions, which is a relevant metric for a highly labor-intensive business such as cleaning. If this information is not consistent with the work performed, there is cause for the public sector to carry out an in-depth investigation. Although these methods appear inefficient, they are examples of how one can increase the efforts by a type of figurative control of access to facilities.

Unreported Employment in Cash Industries

Restaurants and bars may provide an even more fertile area for organized crime (Savona and Berlusconi 2015). This, too, involves avoiding taxes and employer’s contributions. Owning a restaurant is a status symbol in criminal circles. Restaurants and bars are often meeting places for criminals (Korsell et al. 2005, 11). These are places where one receives tips, recruits individuals for criminal projects, hears the latest news, and learns what the police are doing (Steffensmeier and Ulmer 2005). Restaurants are also a platform for selling stolen goods or illegal cigarettes and serving smuggled alcohol.

Restaurants and bars are examples of cash industries (SOU 1997, 111). Such industries are characterized by cash payments and, due to the nature or low value of the purchased goods or services, customers do not request receipts. One common way to increase profits and pay unreported employees is to fail to record all transactions in the cash register. Previously, cash registers could be electronically manipulated so that only a certain percentage of transactions were registered, although it would appear that everything had been handled properly.

One implemented crime prevention legislative scheme imposes requirements for type-approved cash registers in cash industries (Swedish Tax Agency 2014). Even outdoor market stands must have such apparatuses. All sales must be entered and the customer must be offered a receipt. Since it is not possible to manipulate the type-approved cash registers, this entails increasing the efforts by hardening targets.

The use of cash registers—even those that are not type-approved—is important. A special inspection, similar to that for personnel logs, is associated with cash registers (Swedish Tax Agency 2014). Tax agency officials can verify that there is a type-approved cash register that is in use. The presence of tax agency officials in the field also entails an increase in the risks by strengthening formal surveillance.

Household Construction Services

Construction work for individual households is one type of cash industry; “black money” is paid directly to carpenters and other craftspeople. Paying craftspeople under the table can be tempting since private individuals cannot take tax deductions for construction work. As a result, there is a system whereby the tax agency pays 30 percent of the cost of labor.

The system is structured such that the construction company applies to the tax agency for compensation for 30 percent of the cost of labor (Swedish Tax Agency 2014). The application must contain detailed information regarding the identity of the company’s customer. At the same time, the company invoices the customer for the cost of materials and for the cost of labor less 30 percent.

For both construction companies and the individual who ordered the work, this is an incentive to pay clean money against an invoice (Swedish Tax Agency 2011, 1). The system reduces the incentives for being involved with black money and increases the incentive to pay with clean money against an invoice, that is, it removes excuses by assisting compliance.

This regulatory scheme to encourage legal compliance does not, however, have much to do with organized crime since the unreported employment directed toward individual households is small in scale and presumably involves small businesses getting “extra,” for example, by cheating on their taxes. At the same time, the system has attracted a significantly greater number of cunning perpetrators to exploit the system.

Organized crime is always interested in easy money and the State functions as an automatic cash dispensing machine (Korsell, Rönnblom, and Skinnari 2016, 10). This means that what is fundamentally a crime prevention regulatory scheme opens the doors to fraud because perpetrators protected by companies can apply for payment of 30 percent of the cost of labor for work that was never performed. To get a handle on the problem, the tax agency now sends information to the person for whom the claimed work has been performed. This allows the owner of the apartment or house (provided that such person is not participating in the offense) to report if the information is incorrect. Since this is an issue of serial crime, this information can be seen as increasing the risk by extending guardianship.

In addition to construction work, the tax agency pays 30 percent of the cost of labor for household services such as cleaning. This reform has created an entirely legal industry since essentially all household cleaning prior thereto was paid in black money (Swedish Tax Agency 2011, 1). Household work does not appear to be particularly susceptible to fraud since, as a rule, the labor cost is significantly lower than it is for construction work.

Alcohol and Tobacco

Alcohol and tobacco smuggling are historically fertile ground for organized crime (Woodiwiss 2001). When they were illegal, they were more important than narcotics. Alcohol and cigarettes are still interesting because of the high excise taxes (Johansen 2004). Recently, however, the handling of illegal alcohol and tobacco has, in part, undergone a structural change (Skinnari and Korsell 2016). Individuals like Algoth Niska, who once shuttled between islets and skerries, are less common. Instead, smuggling occurs through transportation on roadways. In addition, companies that have been granted a respite in the payment of excise taxes by the tax agency are used (Swedish Tax Agency 2013).

Where the tax agency approves such a tax structure, excise taxes are not paid until the goods are released for consumption, typically when they leave storage and are transported to a retailer. Consequently, perpetrators register companies and ensure that they obtain such permission. Alternatively, they attempt to acquire a company that already has such permission. They can then legally import and sell the goods and then disappear with the money. What remains is a company without assets and with a strawman as the responsible individual (Skinnari and Korsell 2016).

These structures are, however, associated with costs and a great deal of inconvenience. They require a registered company, a decision granting a respite in the payment of taxes, and approved warehouse premises. The permission entails that the company’s executives or strawmen pass checks conducted by the tax agency regarding finances and suitability in general. The regulatory scheme nevertheless entails increasing the efforts, by figuratively controlling access to facilities in that permission is required to handle the goods. By means of field inspections, the tax agency can check the storage area for the goods. This entails increasing the risk by strengthening formal surveillance.

Serving Alcohol

Swedish alcohol policy is distinguished by the fact that liquor and wine cannot be sold via ordinary retailers but, instead, exclusively in specialized state-owned shops (Systembolaget). In other words, there is a monopoly. As a result, illegal alcohol lacks an ordinary retail network for distribution of goods since it is hardly imaginable that state-owned shops would sell such goods (Korsell, Rönnblom, and Skinnari 2016, 10). On the other hand, state ownership has not prevented a long line of store managers from accepting bribes (Karlsson and Korsell 2007, 21). In exchange, the store managers display certain suppliers’ goods to stimulate sales.

Rather than being sold in shops, the alcohol is sold through informal channels, such as workplaces or via the telephone, whereby buyers have access to a telephone number to place orders for home delivery (“mobile liquor store”). It is hardly possible for a regulatory scheme to prevent this type of irregular distribution, which takes place entirely outside of the legislative purview. Of course, some alcohol reaches restaurants and bars, where it is mingled with the alcohol purchased from the state-owned shops. Here, the prerequisites for preventing crime by means of regulation are significantly better.

The alcohol regulatory scheme is strict, and municipalities will conduct extensive license approval procedures before granting an alcohol license to a restaurant or bar (Korsell and Norlin 2015, 15). The business’ finances are reviewed, including the financing behind it. The responsible individual’s fitness is investigated in detail, including checking them against the criminal register. The regulatory scheme thus entails increasing efforts, in the form of controlling access to facilities since an alcohol license is necessary to serve alcohol. The municipality then exercises supervision by means of inspection visits. This supervision relates not only to the handling of alcohol, but checking that a cash register is used to prevent illegal income. A person convicted of any form of financial crime will not receive an alcohol license. This constitutes increasing the risk by strengthening formal surveillance and extending guardianship (the municipalities have an important monitoring task). Many restaurants would not survive financially without an alcohol license. As a result, the approval procedure and the subsequent inspections are powerful crime prevention tools.

Retail Sales of Tobacco

Unlike illegal alcohol, illegal cigarettes are almost always sold openly through legal channels. Illegal tobacco can be bought from tobacconists, gaming shops, and neighborhood shops (Skinnari and Korsell 2016). The shop owners may be part of, or have ended up in, “the long tail of organized crime.” Some of them feel that they are forced to sell illegal tobacco. This illustrates a general problem that occurs when legal business owners begin to conduct business with organized crime. What begins as a good deal often ends badly for business owners, who find themselves victims of extortion, for example (Korsell and Norlin 2015, 15).

Illegal tobacco primarily comprises “cheap whites” (low-price cigarettes from unusual brands) and, to some extent, pirated cigarettes (known brands). Since the shop owners have purchased the cigarettes without a receipt, cigarettes cannot be sold in the customary manner, that is, by entering the sale into the cash register and allowing the revenue to constitute a basis for taxation. In the absence of a taxable deduction for purchase of the illegal cigarettes, the sale would be bad business. Accordingly, the cigarettes are sold under the table. This entails that the tax agency’s inspection of cash registers has a special crime prevention effect against illegal tobacco as well.

Tobacco monitoring in Sweden is extensive: the police, the tax agency, and the municipalities all have a task. The explanation for this is the regulatory schemes that impose requirements regarding excise taxes, as well as warning texts on the packet, display of the cigarettes, prohibition on sale of individual cigarettes, and prohibition on sale to minors. In the aggregate, these regulations with their inspections attain a situational crime prevention effect by means of increasing the efforts as control of access to facilities and an increase in the risk through strengthening formal surveillance and extending guardianship.

Welfare Offenses

As in many other places, welfare services that were previously primarily offered under public auspices have been privatized (Johnson 2010). However, the bill is still paid out of public coffers. Personal assistants for disabled persons are often employed by private assistance companies, and they are tasked with assisting disabled persons with day-to-day living in the disabled person’s home. Individuals with extensive problems may need assistance 24 hours a day. As a result, significant sums are disbursed from public funds to cover the costs of assistance.

Not surprising, organized crime finds these payments appealing (Marklund, Skinnari, and Korsell 2011, 12, Skinnari, Thorell, and Korsell 2015, 8), and large sums have been paid to criminal organizations from public funds. The offense entails reporting that assistants worked more hours than they did. The need for assistance can also be exaggerated. In some cases, the fraud has been so artful that there was no need for assistance at all. Family members of the disabled are sometimes involved in the offense. They may have their own financial interest in allowing the fraud to continue.

To address the problem, licensing requirements are imposed on the companies that provide assistants and on the company’s operational managers (Korsell and Norlin 2015, 15). This includes reviewing the operational manager’s training and experience. The company’s finances are also reviewed. In situational terms, this has increased the efforts. Perpetrating the offense requires significant effort since the license approval procedure serves to control access to facilities. Some cases have drawn significant attention, and thus both a more thorough license approval procedure, as well as day-to-day control involving several public agencies, are reasonable. Sweden’s Minister of Justice recently stated that he is prepared “to go to almost any lengths” to stop the provocative frauds (Svensson 2017). This has also increased the risks by extending guardianship and strengthening formal surveillance.

Most of the welfare system is not, however, company-oriented but is individual-oriented—payments for sick days, disability compensation (early retirement), unemployment, and livelihood support (social security benefits). Can such individual payments be of interest to organized crime? Most who dishonestly receive such remuneration have nothing to do with organized crime. However, taking into consideration that criminal income is irregular and insecure, individuals involved in organized crime have realized that support from the welfare system provides basic security (Skinnari, Vesterhav, and Korsell 2007, 4; Skinnari, Thorell, and Korsell 2015, 8; Marklund, Skinnari, and Korsell 2011).

Support from the welfare system is paid following an assessment. Since welfare offenses have received a great deal of attention and are politically sensitive, assessments of them have become more careful. Moreover, cross-checking different registers has increased, which makes it more difficult to receive “double” benefits. Taken as a whole, this should contribute to increasing the efforts by hardening targets.

Sex Trade

In addition to the punishable offenses of procurement and human trafficking, the purchase of sexual services is also subject to criminal sanctions. Sweden was at the forefront of such legislation, which has spread throughout the Western world. It is possible that criminalization of the purchase of sexual services has rendered prostitution less visible; however, the Internet and mobile telephones have created new opportunities for contacting customers. There is, nevertheless, still some street prostitution. One crime prevention measure to combat street prostitution has been to change local traffic regulations to prohibit vehicles from stopping on certain streets at certain times (Korsell et al. 2010). This entails increasing the efforts by controlling access to facilities for sex buyers and reducing the rewards by disrupting markets for those who earn money from the sex trade.

The sex trade depends on numerous sites to function effectively: restaurants and bars to make contact with customers, taxis for transportation as well as tipoffs, hotels for providing sexual services, apartments to run bordellos, and tobacconists and gaming shops to spread flyers.

One crime prevention method to decrease street prostitution is to increase awareness—the sex trade is often invisible at hotels and restaurants—among business owners and personnel so that they understand how the sex trade works and the role they play in it (Korsell et al. 2010; Forsman and Korsell 2008, 24). This increases the risks by extending guardianship insofar as business owners and personnel can sound the alarm if they suspect sex trade activities.

For those who passively support the sex trade, increased insight can entail removing the excuses by alerting conscience. Regulatory schemes underlie this in whole or in part. Some have already been addressed, such as alcohol licenses. Licenses are also required to conduct taxi businesses and hotels. Those who rent out apartments and commercial premises can be convicted of procurement if they earn money on the sex trade.

Increased Possibilities for Using Situational Regulation